Sharper Image files for bankruptcy
Struggling electronics and specialty gifts retailer Sharper Image Corp. filed for reorganization under Chapter 11 of the bankruptcy code Tuesday, a week after it named a crisis-management expert as its new chief executive.
The San Francisco-based company filed in the Bankruptcy Court for the District of Delaware.
Under Chapter 11, a company is given time to restructure its debts and fulfill obligations.
In a statement, Sharper Image said it will continue to conduct business as usual while it develops a reorganization plan. In a separate filing, Chief Financial Officer Rebecca L. Roedell said the company plans to close 90 of its 184 stores as soon as possible after it sells their inventories.
Last week, the company hired Ron Conway, who runs a New York-based management consultancy firm, as its chief executive. The move came less than a year after hiring direct-marketing veteran Steven Lightman as CEO to help stem sinking sales.
The Sharper Image has long faced falling sales, made worse by an increasingly weak retail environment.
Sharper Image has lost a total of $136 million since January 2005 while its annual sales have plummeted from $776 million to under $400 million 500 fast cash. In its most recent fiscal year, Sharper Image said its sales dropped 26%.
The company’s headaches date to 2004, when Sharper Image’s hodgepodge of high-tech novelty items began losing their quirky appeal.
Sharper Image (SHRP) shares lost 30.6%, in premarket electronic trading Wednesday after closing 10% lower Tuesday.
Filed under: economics by Wolf